Multinational cost of capital and capital structure ppt

The following external sources of finance: share capital, loan capital, overdrafts, trade credit, grants, subsidies, debt factoring, leasing, venture capital, business angels; Short, medium and long-term finance; The appropriateness, advantages and disadvantages of sources of finance for a given situation

Cost of Capital and MNCs • Cost of capital is the weighted cost of equity and debt where the weights reflect the firm’s capital structure • Cost of equity reflects the opportunity cost for investors in a country and will depend on investment alternatives and risk profile • Cost of debt is the net interest expense, i.e., net of The logistics and transportation industry in the United States is highly competitive. By investing in this sector, multinational firms position themselves to better facilitate the flow of goods throughout the world's largest consumer market.

Cost of Capital and MNCs • Cost of capital is the weighted cost of equity and debt where the weights reflect the firm’s capital structure • Cost of equity reflects the opportunity cost for investors in a country and will depend on investment alternatives and risk profile • Cost of debt is the net interest expense, i.e., net of (2) Cost increase vs. 2018 partly due to methodology changes in internal service cost allocations following the implementation of the new divisional structure and higher investments in technology and controls (3) Planned total financial impact by 2022 Cultural capital includes resources ranging from holding a graduate degree to having a grasp of a group’s customs and rituals, both of which may confer an advantage in job markets and social exchanges. Human capital refers to such individual traits as competence and work ethic, which may enable increased educational or professional attainment.

1. Introduction. Despite phenomenal growth in the theory of capital structure there is no unique theoretically predicted relationship between various firm specific business, financial, and lifecycle stage characteristics on one hand and composition and degree of financial leverage and consequent cost of capital on the other. A good estimate is required for: -good capital budgeting decisions – neither the NPV rule nor the IRR rule can be implemented without knowledge of the appropriate discount rate -financing decisions – the optimal/target capital structure minimizes the cost of capital -operating decisions – cost of capital is used by regulatory agencies in ... Factors influencing capital expenditure decisions 1. Availability of Funds. All the projects are not requiring the same level of investments. Some projects require huge amount and having high profitability. If the company does not have adequate funds, such projects may be given up. 2. Minimum Rate of Return on Investment